No. 58, Financial
[1623, CO 60/13, p. 581; received 14 February 1863
]
15 December 1862
In my Despatch of the 4th Instant, marked "Separate," I informed Your Grace that I had reserved the subject of Roads,
and the financial question involved therein, for a subsequent
Despatch. I willnow now advert to that subject and explain the
precise position in which I am placed with respect to these
most indispensable public works in British Columbia.
2. The scheme determined upon in the early part of this
year to carry out these works has been already at different
times fully laid before Your Grace, but for the sake of now presenting
the subject as a whole, I will enter into a brief recapitulation.
3. The lines of Road fromLytton Lytton to Alexandria, and from
Lillooet to Alexandria were undertaken by two of the largest
commercial Firms in the Colony. A portion of the line from
Yale to Lytton, about 50 miles, was undertaken by the Government,
the remaining portion constituting the most difficult section
between Yale and Boston Bar was assigned by Contract to Mr Joseph Trutch a gentleman of high Engineering ability.
4. The works on the two lines aforesaid, and onMr Mr Trutch's
Section were to be carried on at the cost of the Contractors, aided
by loans from the Government, the Contractors being re-imbursed
exclusively by Tolls, but such Loans forming a first charge therein.
This arrangement was imperatively necessary as none of the Contractors
with their own resources could raise sufficient capital to carry out
such extensive works. Without such an arrangement, I could not, for
want of means, have undertaken what I shall hereafterpoint point out the
very existence of the Colony depends upon. By the arrangement, I
enlisted the co-operation of private enterprise, and brought to bear upon
the development of the reserves of the Colony a much larger Capital
than I could ever hope to command so long as the wonderful auriferous
wealth of Carribou remained inaccessible but to a few.
5. The portions of this stupendous work undertaken at the
cost of the Government, havebeen been completed. Mr Trutch's section will not be finished until the Spring, for the removal
of one of the mountain shoulders, involving about 100,000 cubic
feet of blasting in the solid rock, and upon which only a limited
number of men can be simultaneously employed, cannot be earlier effected.
6. Upon the line from Lytton towards Alexandria I regret to say that the Contractors have most signally failed, not, I believe from dishonest motives,but but really from want of means, for they
had constructed 45 miles of Road in a most creditable manner, and
incurred an outlay of 100,000 Dollars. I did everything within
my power, consistently with the interest of the public service
to relieve the pressure upon their finances, but they had commenced
a gigantic undertaking with inadequate means, and were compelled to
relinquish it, throwing the road upon the hands of the Government
when only half completed.
7. From Lillooet towards Alexandria 128 miles of Road
have been completed, and an outlay incurred of 190,000 Dollars.
I fear, however, that, as in the case of the line from Lytton,
the Contractors have here also miscalculated the cost, for I
have just now received from them an urgent application for a
further loan. These gentlemen have hitherto so faithfully and
energetically fulfilled their obligations that I deeply regret
it is not in my powerto to assist them further at present. They
are deserving of every consideration, and as the road itself
offers the most perfect security for the Loan sought and made,
I earnestly trust that it may be in my power before the Spring
season commences to meet their wishes, otherwise I much fear
that they will break down, and we shall then be in the unfortunate
position of having two incomplete lines of road thrown upon our hands.
In
8. In such a case we should be saddled with the liabilities
on both lines to the extent of the excess of valuation of the
work over the advances made. This may be seen by the following
statement.
Lytton-Alexandria Road
.off Valuation of work done, as estimated by
Chief Commissioner of Lands and Works ........ $100,000
.off Loan to Contractors from Treasury
repayable from Tolls .............. $26,500
.off Loan effected by Contractors with
Bank of British Columbia, due
1st March 1863, guaranteed
by Colonial Government ............ $37,500
$ 64,000
.off Balance in favor of Contractor .............. $ 36,000
Lillooet-Alexandria Road
.off Valuation of work done as estimated by
Chief Commissioner of Lands and Works ........ $190,000
.off Loan to Contractors from Treasury
repayable from Tolls .............. $49,000
.off Loan effected by Contractors with
Bank of British Columbia, due
at different periods between 1st
March & 31st December 1863,
guaranteed by Colonial Government .. $75,000
$124,000
.off Balance in favor of Contractors ............. $ 66,000
The rapid completion of both these lines of road is of an
importance to the Country that I can scarcely use language too
strong to express, and how to accomplish this object I amutterly utterly
at a loss without the aid of a further public Loan of Fifty
thousand Pounds (£50,000).
9. The gross Revenue of the Colony for 1863 may be fairly
estimated at £110,000, but that Revenue will be required to
meet outstanding liabilities and will not be disposable for the
works in question which must be vigorously prosecuted so soon as
the weather opens in Spring. A Loan of £50,000, would meet our
wants, and effected at 6 per cent, would involve an annualcharge charge
of £3000, an insignificant sum when contrasted with the signal
benefits derived from such works, producing moreover an immediate
increase in Revenue, and effecting an enormous saving in the
cost of inland Transport.
10. To illustrate this last and most important point, I will
adduce to Your Grace but one fact. Up to the end of last summer
the lowest charge for carrying goods from Douglas by way of
Lillooet to Alexandria was 61 cents perpound pound, or £1366 per
Ton! Now in anticipation of the completion of the road, one
of the most substantial Carriers in the Colony has lately
tendered for the transport of all Government stores required in
1863 over the same line, at the rate of 21 Cents per pound:
that is at a reduction of no less than 40 cents per pound or
896 dollars per ton, as compared with the rate charged in
1862, being in short a saving to the public to that extent upon
all goods carried from Douglas to Alexandria, merelyfrom from the
effect of forming Roads.
11. To pursue this illustration one step further. By the
Returns of Roads Tolls it appears that Four thousand two hundred
tons of goods have passed Yale and Douglas this season for the
upper Country, assuming at a very low estimate that 1000 tons
were forwarded to Quesnel and Alexandria, and that a like
quantity only will be taken up in 1863, the aggregate saving
to the public by the reduction in the cost of transport at
therate rate before stated, would amount to no less a sum than
896,000 Dollars! These are facts which speak more forcibly
than any language I can employ on behalf of the measure I now
propose, and I need not point out to Your Grace that until
such prodigious charges on trade and industry are removed any
attempt to increase the Public Revenue by the imposition of
further Taxes must prove disastrous to the Colony.
12. I trust I have saidsufficient sufficient to convince Your Grace
of the propriety of my being permitted to extend the British
Columbia Loan to £100,000. That is the sum upon which I
calculated when I started the great public works which I have
here described. Tolls are levied on the new Roads which will
yield an increase not only to pay the interest of the Loan,
but also to provide for the repayment of the Capital. The
means and resources of the Colony are amply sufficient to
warrant theoutlay outlay, and to give the fullest security for its
repayment. I do not ask for an Imperial guarantee. I do not
ask that the Imperial Government should assume any liability
or responsibilty in the matter, for I feel the most perfect
confidence that it can be arranged on the sole credit of the
Colony. I therefore hope that Her Majesty's Government will
not withhold their sanction to my proposition, to enable me
to carry out a measure which is not only now so immediately
fraught with advantages, andessential essential to the progress and
prosperity of British Columbia, but which assumes a wider
importance when viewed as the means of prosecuting works which
will presently become an indispensable link in the chain of
overland communication with Canada, and give a tenfold value
to these distant possessions of the British Crown.
I have the honor to be
My Lord Duke
Your Graces most obedient
and humble Servant
James Douglas